PIP is another DWP failure – predicted 20% savings slashed to 5%
- Category: Latest news
- Created: Monday, 04 April 2016 17:50
Personal independence payment (PIP) has turned out to be yet another failure for the DWP, as promised cuts of 20% have been reduced to a forecast 5%. The failure to cut costs mirrors the transfer from incapacity benefit (IB) to employment and support allowance (ESA), which also did not produce the promised savings.
Ministers and shadow ministers have been making conflicting claims about whether the government is set to pay out more or less in benefits to sick and disabled claimants over the rest of this parliament.
As Full Facts reports, neither side have been accurate in their use of statistics.
The Conservatives have claimed that spending on the main disability benefits will increase over the course of this parliament.
This is true to the extent that spending on DLA, AA and PIP will increase very slightly from £21.7 billion to £21.8 billion a year between 2015 and 2020. But these are far from the only benefits that most disabled people rely on.
Labour have claimed that benefits spending on people with disabilities will fall by £1.2 billion a year across this parliament. However, according to Full Fact:
“Spending on all disability, incapacity, industrial injuries and carer’s benefits, including related housing benefit, is expected to fall by £1.2 billion by the end of this parliament. Spending won’t fall by this amount every year—it will fall by £295 million each year on average.”
When it comes to spending on PIP, however, the Office for Budget Responsibility (OBR) are forecasting that, without the now abandoned changes to PIP eligibility rules announced in the budget, spending on PIP will only reduce by 5% compared to what would have been spent on DLA.
According to the OBR, they have had to revise the expected success rate for DLA to PIP reassessments up from the DWP’s original estimate of 80%. The OBR now expect 83% of reassessments to result in an award of PIP after mandatory reconsiderations and appeals are taken into account.
In addition, the DWP had originally claimed that the average PIP award would work out at £86 a week. However, significantly more people are being awarded the enhanced rate of the daily living component and the mobility component of PIP than the DWP expected. The result is that the average award is now expected to be worth £100 a week.
So, like the IB to ESA transfer before it, the change from DLA to PIP looks like it will heap an enormous amounts of misery on disabled claimants without any significant savings for the taxpayer.
In fact, given that the saving is only expected to be 5% rather than 20%, when you add in the massive additional costs of the PIP assessment regime and the huge increase in appeals, the savings may be very tiny indeed.
You can read more on this at Full Fact